Switch to:
Agilent Technologies Inc (NYSE:A)
Interest Coverage
7.52 (As of Jan. 2014)

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company’s Operating Income (EBIT) by its Interest Expense. Agilent Technologies Inc's Operating Income for the three months ended in Jan. 2014 was $218 Mil. Agilent Technologies Inc's Interest Expense for the three months ended in Jan. 2014 was $-29 Mil. Agilent Technologies Inc's interest coverage for the quarter that ended in Jan. 2014 was 7.52. The higher the ratio, the stronger the company’s financial strength is.

A' s 10-Year Interest Coverage Range
Min: 0.53   Max: 9999.99
Current: 8.89

0.53
9999.99

During the past 13 years, the highest interest coverage of Agilent Technologies Inc was 9999.99. The lowest was 0.53. And the median was 8.89.

A's Interest Coverageis ranked lower than
57% of the 1547 Companies
in the Global Scientific & Technical Instruments industry.

( Industry Median: 76.29 vs. A: 8.89 )

Definition

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company’s Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage=-1*Operating Income/Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

Agilent Technologies Inc did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt is 0, or Interest Expense is positive, then

Agilent Technologies Inc had no debt.

Agilent Technologies Inc's Interest Coverage for the fiscal year that ended in Oct. 2013 is calculated as

Here, for the fiscal year that ended in Oct. 2013, Agilent Technologies Inc's Interest Expense was $-107 Mil. Its Operating Income was $951 Mil. And its Long-Term Debt was $2,699 Mil.

Interest Coverage=-1*Operating Income (A: Oct. 2013 )/Interest Expense (A: Oct. 2013 )
=-1*951/-107
=8.89

Agilent Technologies Inc's Interest Coverage for the quarter that ended in Jan. 2014 is calculated as

Here, for the three months ended in Jan. 2014, Agilent Technologies Inc's Interest Expense was $-29 Mil. Its Operating Income was $218 Mil. And its Long-Term Debt was $2,695 Mil.

Interest Coverage=-1*Operating Income (Q: Jan. 2014 )/Interest Expense (Q: Jan. 2014 )
=-1*218/-29
=7.52

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

The higher the ratio, the stronger the company’s financial strength is.


Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company’s overage financial strength.


Related Terms

Operating Income, Interest Expense, Financial Strength


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Agilent Technologies Inc Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
interest_coverage At Loss8.006.726.426.460.535.9012.4511.088.89

Agilent Technologies Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
interest_coverage 13.6110.4212.0011.2510.698.688.528.749.507.52
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide